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January 5, 2008.


June 12, 2007

Are Unfair Takedowns Becoming EBay's Trademark?

We've had quite a few stories here (see "Embroidery Piracy and EBay/PayPal Privacy" for example) about abuses of the power EBay's Verified Rights Owner (VeRO) programs gives vendors to arbitrarily take down auctions. But while most of those stories have involved takedowns over alleged copyright infringement, one reader's recent experience suggests that trademark claims might be an area where the abuses are even more troubling.

"I recently listed some Don Ed Hardy T-shirts and hats on EBay," the reader wrote. "Within four hours they were all taken down, and within eight hours my EBay account was suspended. I received an e-mail from EBay saying they had been taken down because VeRO member 'Nervous Tattoo, Inc., dba Don Ed Hardy ,' had claimed that my items were counterfeit."

The reason the reader was relatively certain that she was selling authentic Don Ed Hardy merchandise was that, as a military family member, she had purchased the clothing through the local PX. "What is important here is that my items are all 'Brand New With Tags.' We live in an area where the Ed Hardy brand is not that well known, so I was able to get them at a clearance price. I have the receipt, and I purchased them from a huge, very reputable company called AAFES (Army Air Force Exchange Services). Most people in the military know these stores as the BX or PX. AAFES have over 12,000 stores worldwide and directly serves the United States military. This was the company that Nervous Tattoo, a big Hollywood outfit, was claiming sold me counterfeit goods."

As with all of EBay's VeRO notices, the reader was told that her only recourse if she thought the takedown was a mistake was to contact the intellectual property owner who had made the claim. So she wrote to the Nervous Tattoo "fraud" department and attempted to persuade them with the receipt, detailed pictures of the merchandise with the AAFES tags still clearly attached, and an e-mail from AAFES headquarters confirming the merchandise was authentic. But the folks at Nervous Tattoo seemed uninterested in determining whether the goods were actually counterfeit. Instead, all of her very polite queries to the Don Ed Hardy fraud staff received terse, nasty responses accusing her, AAFES, and basically anyone else selling their merchandise on EBay of being crooks.

While the reader wanted to get her auctions reinstated, her bigger concern was getting the suspension of and black marks against EBay account removed. "I have been with EBay for over eight years with thousands of all positive feedback reports -- not one neutral, not one negative," she wrote. "I have worked very hard for a long time to maintain my feedback rating. I am an honest person and I have done nothing wrong. I feel like my legs have been kicked out from underneath me."

As she began the process of getting EBay to reinstate her account - which includes having to take a condescending online tutorial on intellectual property and swearing that you'll never be bad again - the reader also was able to contact with other EBay sellers whose Don Ed Hardy auctions had been taken down. "Some sellers who had not yet actually sold any Don Ed Hardy goods were told by the fraud department that 'test purchases' had proven their goods were counterfeit," the reader wrote. "Some were told that it didn't matter they could prove their merchandise was authentic - Don Ed Hardy would continue to take down their listings via VeRO by citing 'violation of a trade agreement' between the company and its distributors. And all were threatened as I was with trademark litigation that could result in treble damages, paying their legal costs, etc."

Our reader was not inclined to put up with any such nonsense, and contacted everyone she could think of to get the nervy Nervous Tattoo folks to back down. "I have filed several formal complaints with agencies here and in California where Don Ed Hardy is located," she wrote. "I also contacted the Public Citizen organization which has done a lot of work in this area. In addition to that, I tried contacting Mr. Henry Mandell, the president of Don Ed Hardy, on several occasions to respectfully ask that they remove any black marks against me with EBay. I did reach one Ed Hardy sales representative who admitted the items were made for AAFES 'off price' and were indeed authentic. But the 'fraud department' continued to say they would not allow me to list my items again."

Perhaps it was just the cumulative effect of all the steps she took, but ultimately the reader did succeed in finding a Nervous Tattoo official who acknowledged the authenticity of the merchandise and permitted her auctions to proceed. But the reader certainly remains unsettled by the experience, particularly how EBay leaves those falsely accused of trademark infringement to beg for mercy from their accusers. "One thing I learned in this situation is that the counternotice provisions in DMCA takedowns don't work for trademark infringement accusations," the reader wrote. "With trademark law, the burden of proof seems to lie more with the accused than the accuser. This whole thing should have never happened, but it just seems that with EBay a VeRO member can claim counterfeit any time they want as many times as they want with no repercussions whatsoever."

It's pretty scary to think there are actually circumstances where one would be better off if the DMCA applied, but that does seem to be the case here. Of course, it's certainly true that trademark holders like Don Ed Hardy/Nervous Tattoo suffer from the sale of truly infringing products on EBay and elsewhere online all the time. But there needs to be some sort of balance that prevents trademark holders from abusing the system just because online sellers of authentic goods may be undercutting their price. Otherwise, EBay may find its brand standing for unfair takedowns in all our minds.

Posted by Ed Foster on June 12, 2007 12:43 AM
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